Samsung Secures $6.4B Funding for $40B Texas Fab in CHIPS Act Deal

Samsung Electronics has secured a substantial $6.4 billion funding from the U.S. government under the CHIPS and Science Act to construct its new fab complex in Taylor, Texas. This marks the third major award under the act in recent weeks, with Intel, TSMC, and now Samsung all receiving multi-billion dollar funding packages to boost domestic chip production. The total cost of Samsung’s new fab complex is estimated to reach $40 billion upon completion later this decade.

The announcement of Samsung’s CHIPS Act funding took place at a celebratory event attended by U.S. Secretary of Commerce Gina Raimondo and Samsung Semiconductor CEO Kye Hyun Kyung. During the event, Kyung outlined the strategic objectives of the expansion, highlighting that the additional funding will not only enhance production capacity but also strengthen the local semiconductor ecosystem. Samsung plans to equip its fab near Taylor, Texas, with state-of-the-art wafer fab tools to manufacture advanced chips. While unofficial at this stage, reports suggest that Samsung aims to produce semiconductors using its 2nm-class process technology starting in 2026.

In a statement, U.S. President Joe Biden expressed his satisfaction with the preliminary agreement between Samsung and the Department of Commerce, stating that it will bring advanced semiconductor manufacturing and research and development to Texas. Biden emphasized that this announcement will unlock over $40 billion in investment from Samsung and solidify central Texas’s position as a semiconductor ecosystem. The project is expected to create at least 21,500 jobs and leverage up to $40 million in CHIPS funding for workforce training and development. The facilities will support the production of powerful chips crucial to advanced technologies like artificial intelligence while bolstering U.S. national security.

Samsung has been a significant contributor to the Texas economy for many years, commencing chip manufacturing in the U.S. back in 1996. With previous investments totaling $18 billion in its Austin operations, Samsung’s expansion into Taylor with an additional investment of at least $17 billion underscores its status as one of the largest foreign direct investors in U.S. history. The total anticipated investment in the new fab surpasses $40 billion, making it one of the nation’s largest greenfield projects and transforming Taylor into a major semiconductor manufacturing hub.

Kyung highlighted the substantial economic impact of Samsung’s operations, citing a nearly twofold increase in regional economic output from $13.6 billion to $26.8 billion between 2022 and 2023. The ongoing expansion is projected to further stimulate economic growth, generate thousands of jobs, and contribute to the overall development of the community.

“We are not simply expanding production facilities; we are strengthening the local semiconductor ecosystem and positioning the U.S. as a global semiconductor manufacturing destination,” said Kyung. “To meet the expected surge in demand from U.S. customers for future products like AI chips, our fabs will be equipped with process technologies to ensure security in the U.S. semiconductor supply chain.”

Samsung is also committed to environmental sustainability and workforce development. The company plans to operate using 100% clean energy and implement advanced water management technologies. Additionally, it is investing in education and training programs to cultivate a new generation of semiconductor professionals. These initiatives include partnerships with educational institutions and tailored programs for military veterans.

Kyung expressed gratitude to President Biden, Secretary Raimondo, and other government and community supporters for their ongoing support. This collaborative effort between Samsung, various levels of government, and the local community is crucial in advancing America’s semiconductor industry and ensuring its global competitiveness.

The Semiconductor Industry Association commended Samsung’s investment in U.S.-based manufacturing, stating that it will bring more semiconductor production, innovation, and jobs to American shores. The association also praised the U.S. Commerce Department for making significant progress in implementing the CHIPS Act’s manufacturing incentives and R&D programs. They look forward to continued collaboration with government and industry leaders to revitalize U.S. chip manufacturing and research for years to come.

Background Information

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About Intel:

Intel Corporation, a global technology leader, is for its semiconductor innovations that power computing and communication devices worldwide. As a pioneer in microprocessor technology, Intel has left an indelible mark on the evolution of computing with its processors that drive everything from PCs to data centers and beyond. With a history of advancements, Intel's relentless pursuit of innovation continues to shape the digital landscape, offering solutions that empower businesses and individuals to achieve new levels of productivity and connectivity.

  

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About Samsung:

Samsung, a South Korean multinational conglomerate, has established itself as a global leader in various industries, including electronics, technology, and more. Founded in 1938, Samsung's influence spans from smartphones and consumer electronics to semiconductors and home appliances. With a commitment to innovation, Samsung has contributed products like the Galaxy series of smartphones, QLED TVs, and SSDs that have revolutionized the way we live and work.

  

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About TSMC:

TSMC, or Taiwan Semiconductor Manufacturing Company, is a semiconductor foundry based in Taiwan. Established in 1987, TSMC is a important player in the global semiconductor industry, specializing in the manufacturing of semiconductor wafers for a wide range of clients, including technology companies and chip designers. The company is known for its semiconductor fabrication processes and plays a critical role in advancing semiconductor technology worldwide.

  

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